How two brothers went from growing up on a sailboat to making underwater military vehicles 

Vatn Systems founders Nelson and Freddie Mills spent their childhood cruising over turquoise waters, doing their homework on a sailboat off the coast of Caribbean islands. While their surroundings were idyllic, their vessel of choice was decidedly not. “The first boat I remember, I think our parents bought it for like five, ten grand,” Freddie said. “It didn’t have refrigeration. It was leaky.” 

But it turns out an unreliable ship is a great place to raise future engineers. The brothers, who spent several months of each year on a sailboat, would occasionally put down their homework and pick up a wrench, helping their father jerry-rig mechanical solutions. “We didn’t have enough money to rebuild an engine, so my dad and I and Nelson, we just figured it out,” Freddie said.  

After spending years on the water, the brothers have now turned their ambitions to just below the ocean’s surface. Last year, the two paired up with engineer Geoff Manchester and Dan Hendrix, a former special forces dive team officer, to found Vatn Systems, a startup producing autonomous underwater vehicles primarily for defense uses. On Tuesday, the Portsmouth, Rhode Island-based company announced a $13 million seed round led by DYNE Ventures and with participation from Lockheed Martin Ventures, RTX Ventures, In-Q-Tel and others. The round brings the startup’s total funding to $16.5 million. 

The company’s vehicles — the first prototype is about fifty pounds — can swim within the top 300 meters of water and can carry weapons like torpedoes. The vehicles have other uses as well, like passing messages between ships in areas where signals are blocked by adversaries. To do so, a string of Vatn vehicles autonomously get into position and send data from down the line of drones to a ship, with the communication happening out of enemy sightline. “Our ultimate goal is to become an underwater autonomy prime,” Nelson said. 

Vatn also plans to capitalize on the Department of Defense’s current obsession: swarming technology, meaning a large group of drones that a single military officer can operate at once. While there are plenty of startups building aerial drone swarms, Vatn wants to be the government’s answer for underwater swarms. Right now, a single user can operate about 10 Vatn vehicles. “Eventually it’ll be like hundreds,” Nelson said.  

Vatn will face well-capitalized competition. Defense juggernaut Northrop Grumman has built its own underwater vehicle prototype, Manta Ray, and the Pentagon selected defense startup Anduril to continue producing its own autonomous underwater device. Nelson argued that Vatn aims to make its vehicles less expensive and easier to mass-produce than competitors. 

The brothers have a long road ahead, expanding their 18-person team and going to market in 2025. But, by setting up shop right on Rhode Island’s Narragansett Bay, the pair has ensured they will never stray too far from their seafaring roots. “I’m staring at my sailboat right now,” Freddie said with a smile, looking onto the dock beside Vatn’s office. 

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